Within the portfolio, Terra Firma encourages improvements in strategy-setting and in operational areas, by way of both our approach to active management and the standard Terra Firma governance and monitoring regime.
The nature of improvements varies from investment to investment. A range of potential strategic and operational improvements are likely to be developed during the investment process, and these are refined and augmented throughout the ownership period. Areas where the standard Terra Firma governance approach typically results in changes include corporate governance, reporting/ transparency, monitoring and the delegation of authorities to and from boards of directors.
Terra Firma introduces strong corporate governance frameworks to all new investments, creating boards with executive, non-executive and Terra Firma members, with documented delegations of authority. Boards receive regular and in depth performance reports, which include key non-financial metrics, often relating to ESG factors.
Terra Firma's portfolio businesses provide data to Terra Firma directly, and via board representatives. Where ESG factors are particularly relevant for a specific business, these are reported on more frequently. Terra Firma drives high quality reporting from investees. ESG monitoring is also undertaken throughout the portfolio, primarily through the reporting of annual ESG performance indicators relevant to each investment.